TDS Returns Filing

TDS (Tax Deducted at Source) Returns are quarterly statements that contain information about tax deducted and deposited with the government. These returns must be filed by all persons who have deducted tax at source as per the Income Tax Act provisions.

Filing TDS returns on time is a mandatory compliance requirement that helps the government track tax collection and ensures that taxpayers receive proper credit for taxes deducted from their income, avoiding potential penalties and legal complications.

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Understanding TDS Returns

TDS Returns are statements filed by deductors to report the tax deducted at source from various payments made during a specific quarter. These returns provide crucial information to the Income Tax Department about tax collection and help taxpayers claim credit for taxes already deducted from their income.

Types of TDS Return Forms

Form 24Q - For TDS on Salary Payments

Form 26Q - For TDS on Payments other than Salary to Residents

Form 27Q - For TDS on Payments to Non-Residents

Form 26QB - For TDS on Sale of Immovable Property

Form 26QC - For TDS on Rent Payments by Individuals/HUFs

Form 27EQ - For Tax Collection at Source (TCS)

TDS Return Filing Process

The TDS Return filing process involves these key steps:

1

Prepare TDS Statement using NSDL's Return Preparation Utility (RPU)
2

Validate the TDS Statement using File Validation Utility (FVU)
3

Generate and Attach Digital Signature (if applicable)
4

Upload the TDS Return on the TRACES Portal
5

Verify the Return using Electronic Verification Code (EVC)
6

Download Acknowledgment and File Status

Who Must File TDS Returns?

Employers Deducting TDS on Employee Salaries

Businesses Making Payments to Contractors and Professionals

Banks and Financial Institutions Paying Interest

Property Buyers Deducting TDS on Property Transactions

Tenants Paying Rent Above Threshold Limits

Companies Paying Dividends or Commission

Government Departments Making Various Payments

E-commerce Operators Facilitating Seller Transactions

Insurance Companies Paying Commission to Agents

Any Person Required to Deduct Tax Under the Income Tax Act

Penalties for Late Filing or Non-Filing

Non-compliance with TDS return filing requirements attracts significant penalties. Late filing incurs a fee of Rs. 200 per day under Section 234E (capped at the TDS amount). Additionally, Section 271H imposes penalties ranging from Rs. 10,000 to Rs. 1,00,000 for failure to file returns or providing incorrect information. Interest at 1.5% per month is also charged for late deposit of TDS under Section 201(1A).

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